States of panic

There's fiscal chaos in capitals coast to coast and the stimulus didn't stop it. A tour of the mayhem, from the nearly bankrupt, like California, to the flush.

Topics: Education, U.S. Economy, Barack Obama, Taxes,

States of panic

On Monday, during a White House meeting with the nation’s governors, President Obama told his listeners that the check was in the mail. Fifteen billion in Medicaid money from the stimulus bill was distributed beginning Wednesday. “That means,” he said, “that by the time most of you get home, money will be waiting to help 20 million vulnerable Americans in your states keep their healthcare coverage.”

Perhaps no part of Obama’s economic stimulus package is as important as the billions of dollars in aid it will provide to state governments. The National Governors Association said in December that state budgets have not looked so bad for 25 years. But the stimulus package will not plug all the holes. Most of the money that can be applied to state budget shortfalls is contained in the Medicaid and “Fiscal Stabilization Fund” portions of the package, which amount to $87 billion and $54 billion, respectively. According to a report released Friday by the Center on Budget and Policy Priorities (CBPP), projected state deficits over the next 30 months will total about $350 billion. “The amount of funding that will go to states to help them maintain current activities,” says the report, “is approximately $135 billion to $145 billion — or about 40 percent of projected state deficits.”

With sales tax revenues plunging in the recession, an earlier CBPP study had revealed that after the first half of fiscal year 2009, more than 40 states faced significant gaps between projected revenues and projected expenditures, with more than 30 states already projected to come up short in FY 2010 as well. Prior to the stimulus, most states were considering some combination of cuts to healthcare, public education, higher education and state payrolls. According to the CBPP, 32 states were cutting or planned to cut higher education, and 26 were weighing or had begun cuts to  K-12 and early education. California, with a projected budget deficit of $42 billion, the largest of any state in history, had to force 200,000 state workers to take an unpaid day off and also shut down DMV offices two days each month. The federal money allows most states to forgo, delay or downsize deep cuts in healthcare spending and K-12 education (about $40 billion of the fiscal stabilization fund is for ongoing education costs), but in many cases there will still be furloughs for state employees, cuts to university budgets and higher taxes and fees. And that’s before the states raid their rainy-day funds.



How much pain remains? In the chart below, Salon groups the 50 states loosely by relative levels of distress, and then uses figures from the CBPP and the National Conference of State Legislatures to show the amount of red ink for each state and the amount of stimulus cash expected. Stimulus numbers are from the NCSL, and include estimates of the total amount of money the state will receive, and then the subtotals from the two categories of cash that can be applied most directly to state budgets: the Fiscal Stabilization Fund and Medicaid money. Except where noted by asterisk, shortfall numbers come from the CBPP; asterisked estimates for FY2010 come from various sources, including published remarks of state officials. CBPP calculated its shortfall numbers using data from state officials and state public policy centers. The FY2010 figures are projections, while each FY2009 figure incorporates the deficit with which the state began fiscal 2009 and any additional difference between spending and revenue that has occurred during the fiscal year. (These shortfall numbers may differ from other published estimates or projections of state deficits; those figures may be fresher and reflect further declines in revenue collection.)

Feeling the most pain

California
FY2009 shortfall: $35.9 billion
FY2010 shortfall: $25.9 billion
California’s projected budget deficit for 2010, which had ballooned in state estimates to $42 billion, was the worst in American history, and even a month ago it was estimated that stimulus funds would cover less than half of it. The just-signed budget deal cuts enrollment at the Cal State university system by 10,000, carves $400 million from the state’s famously massive corrections department, and hikes taxes $12.8 billion. Even the lieutenant governor has to fire half his staff. Before the deal, Gov. Arnold Schwarzenegger  had already ordered work to stop on 275 public works projects, had furloughed 200,000 state employees and ordered some state agencies to shut two days a month.
Total projected stimulus funding to state: $26 billion
Fiscal Stabilization Fund: $4 billion
Medicaid funds: $11 billion

New York
FY2009 shortfall: $6.4 billion
FY2010 shortfall: $13.7 billion
The state has raised an additional $359 million in taxes and fees, including a 14 percent tuition hike at state universities and a higher state income tax on residents earning more than $250,000, as well as another $817 million in new revenue from other sources. But New York will still need to come up with more money before April 1 to close a gap for the next fiscal year that may be $14 billion. Cuts to retirement benefits for state employees may be necessary. Gov. David Paterson has warned that the stimulus will not be “a silver bullet,”  and that the state must reform its healthcare system. He has hit back at a group that has bought ads criticizing him for anticipated cuts in healthcare. “The ads say this is the worst cut ever. Yes! Exactly!”
Total projected stimulus funding to state: $22.7 billion
Fiscal Stabilization Fund: $2.4 billion
Medicaid funds: $12.6 billion

New Jersey
FY2009 shortfall: $4.6 billion
FY2010 shortfall: $4 billion
On Monday, Gov. John Corzine said, “The stimulus packagewill cover about half the challenges we have on a year-over-year basis.” Corzine has won approval to delay presentation of his proposed 2010 budget till March 10; he now says it will be 10 percent smaller than the 2009 budget. He has already ordered state workers to take unpaid furloughs in May and June, and proposed $500 million in new budget cuts the day President Obama signed the stimulus bill. The state Legislature is moving on a bill to allow municipalities to defer payment on as much as half of their pension obligations to public employees.
Total projected stimulus funding to state: $6.2 billion
Fiscal Stabilization Fund: $1 billion
Medicaid funds: $2.2 billion

Illinois
FY2009 shortfall: $8.0 billion
FY2010 shortfall: $9.0 billion*
Illinois has one of the worst budget deficits in the country. Before he was booted from office, ex-Gov. Rod Blagojevich laid off 450 state employees and closed more than 20 state parks and historic sites. The state is also extending the amount of time it takes to pay doctors and hospitals for Medicaid services. “We need more money,” said state Treasurer Alexi Giannoulias of the stimulus. “We could use a lot more assistance.”
Total projected stimulus funding to state: $8.9 billion
Fiscal Stabilization Fund: $1.6 billion
Medicaid funds: $2.9 billion

Ohio
FY2009 shortfall: $1.9 billion
FY2010 shortfall: $2 billion
The  35,000 members of the Ohio state employees’ union, the Ohio Civil Service Employees Association (OCSEA), will reportedly vote on a proposal to accept two-week furloughs in lieu of a simple pay cut. The furlough would amount to a pay cut of 3.85 percent; Gov. Ted Strickland would also take the furlough, and the de facto pay cut. Strickland has called any additional shortfall remaining post-stimulus “small and manageable.”
Total projected stimulus funding to state: $8.3 billion
Fiscal Stabilization Fund: $1.4 billion
Medicaid funds: $3 billion

 

Nevada
FY2009 shortfall: $1.4 billion
FY2010 shortfall: $1.1 billion
Tax revenues have plunged in Nevada and unemployment has surged above 9 percent. The state has nearly depleted its reserve fund, and stimulus funds will only cover about one-fifth of the state’s budget deficit. Gov. Jim Gibbons wants to slash the University of Nevada’s budget by $475 million. The proposed cuts are so deep that the chairman and vice-chairman of the Board of Regents wrote an opinion piece for the Las Vegas Sun saying that if passed, the cuts could mean the de-accreditation of the university, the demise of five of the state’s seven colleges, or the elimination of the state’s medical and dental schools. “The governor’s budget would, for all practical purposes, eliminate higher education in Nevada in any semblance of the form that we know now.”
Total projected stimulus funding to state: $1.4 billion
Fiscal Stabilization Fund: $316 million
Medicaid funds: $450 million

Oregon
FY2009 shortfall:
$442 million
FY2010 shortfall: $3 billion through FY2011*
Oregon does not have significant reserve funds, so is vulnerable during economic downturns. Stimulus money will reduce cuts to Oregon’s education budget from $167 million to $116 million. Gov. Ted Kulongoski has warned that public schools may start summer vacation weeks early to close the state’s looming budget gap. About one-third of the state’s school districts will almost certainly have to cancel three or four school days before the end of this school year. Twenty districts have already dropped some days from their calendar after mid-fiscal-year budget cuts in December.
Total projected stimulus funding to state: $2.4 billion
Fiscal Stabilization Fund: $464 million
Medicaid funds: $830 million

Michigan
FY2009 shortfall:
$672 million
FY2010 shortfall: $1.6 billion
With its rusting industrial economy, Michigan has had budget shortfalls every year since 2001. Gov. Jennifer Granholm, who will present her plan for discretionary spending in March, intends to use some stimulus funds to avoid planned cuts of $59 per pupil for public education and 3 percent to the higher education budget. But she may still need to make $670 million in cuts, lay off 1,500 government workers, and raise $230 million in new revenues.
Total projected stimulus funding to state: $7 billion
Fiscal Stabilization Fund: $1 billion
Medicaid funds: $2.2 billion

Connecticut
FY2009 shortfall: $1.9 billion
FY2010 shortfall: $4 billion
Connecticut’s popular M. Jodi Rell is among the blue-state GOP governors who have endorsed the stimulus. But Connecticut’s problems are dire, and Democrats in the state Legislature say the governor’s proposed budget, which does not include tax hikes, will not close the rest of the gap. And her budget is already draconian, cutting deeply into children’s healthcare, dental coverage for the poor and higher education. She is also asking state employees for $225 million in givebacks, proposing the elimination of 23 state agencies and hoping to entice 3,000 state employees, aged 55 or older, to retire.
Total projected stimulus funding to state: $2 billion
Fiscal Stabilization Fund: $615 million
Medicaid funds: $880 million

Arizona
FY2009 shortfall: $3.5 billion
FY2010 shortfall: $3 billion
State spending was already been reduced by a mid-year budget fix signed Jan. 31, but on Tuesday, Gov. Jan Brewer sent a memo to state agency heads asking them to identify more potential cuts of up to 20 percent in their departments. Already on the target list: Child Protective Services, Meals on Wheels and nurse training.
Total projected stimulus funding to state: $4.5 billion
Fiscal Stabilization Fund: $808 million
Medicaid funds: $1.9 billion

Rhode Island

FY2009 shortfall: $802 million
FY2010 shortfall: $450 million
The Rhode Island Legislature may make state cigarette taxes the highest in the country, at $3.46 per pack. Gov. Donald Carcieri has also suggested selling state land, delaying payment of a $10 million settlement in the fatal 2003 Great White fire at the Station nightclub in West Warwick and slashing funds to municipalities. With the stimulus on the way, the heavily Democratic state Legislature is pushing back against the Republican governor.
Total projected stimulus funding to state:
$1 billion
Fiscal Stabilization Fund: $137 million
Medicaid funds: $470 million

Louisiana
FY2009 shortfall: $341 million
FY2010 shortfall: $2 billion
Louisiana lawmakers are apparently interested in the provision inserted by Rep. Jim Clyburn, D.-S.C., in the stimulus bill to allow state legislatures to tap into stimulus money even when the governor does not formally request it. Clyburn added the clause out of concern that his own state’s governor, Mark Sanford, would not request the stimulus funds; with Louisiana Gov. Bobby Jindal also expressing hesitance to access the money, members of the state Senate have been making inquiries about how the Clyburn provision works. Senate budget analyst Sherry Phillips-Hymel has said the stimulus will not cover the state’s expected shortfall for fiscal 2010, however, and budget cuts will be necessary. They will most likely fall on higher education and healthcare. Higher education cuts may go as high as $116 million, or 28 percent of the state university budget, which would mean the loss of 1,500 jobs. Jindal presents a budget on March 13.
Total projected stimulus funding to state: $3.8 billion
Fiscal Stabilization Fund: $587 million
Medicaid funds: $1.6 billion

Florida
FY2009 shortfall: $5.7 billion
FY2010 shortfall: $5.8 billion
The state Legislature meets March 3, and Charlie Crist, one of the Republican governors who welcomed the stimulus, thinks the stimulus will prevent tax increases. State services have been cut annually since 2007, and now the state housing market has been especially hard hit by the collapse of the housing bubble. Property tax receipts are falling and budget cuts are looming for public schools. (Florida is not eligible for stimulus money for education because of how it funds education.) But Crist is already at odds with his fellow Republicans in the state Legislature. He has vetoed their attempt to cut a program to buy Everglades land for conservation, and they have opposed his deal with the Seminole tribe for a casino operation that would mean at least $100 million in revenues annually for the state.
Total projected stimulus funding to state: $11 billion
Fiscal Stabilization Fund: $2 billion
Medicaid funds: $4 billion

Delaware
FY2009 shortfall: $443 million
FY2010 shortfall: $557 million
To make sure residents understand the state’s dire financial situation, Gov. Jack Markell has embarked upon a 61-stop budget woe “reality check” presentation series at locations throughout the state. The state’s own projected shortfall for fiscal 2010 is $606 million, and the budget must be balanced by June 30. Markell thinks the stimulus will cover $175 million of that, but for the rest he is targeting the payroll of the state workforce, with layoffs, furloughs and cuts in health benefits.
Total projected stimulus funding to state: $802 million
Fiscal Stabilization Fund: $109 million
Medicaid funds: $320 million

Vermont
FY2009 shortfall: $125 million
FY2010 shortfall: $253 million
Gov. James Douglas, another of the blue-state Republicans supporting the stimulus, has expressed resentment at the idea that the stimulus is a “handout.” “We’re doing the heavy lifting here,” Douglas said. In Vermont heavy lifting may mean laying off 660 state employees; state lawmakers have already rejected proposed cuts to V-Pharm, a program that supplies prescription drugs for the elderly. The state has closed three welcome centers for tourists, and plans to shut another.
Total projected stimulus funding to state: $700 million
Fiscal Stabilization Fund: $78 million
Medicaid funds: $280 million

Wisconsin
FY2009 shortfall: $1.2 billion
FY2010 shortfall: $2.9 billion
Hunting for more revenue, Gov. Jim Doyle has proposed taxing iTunes music purchases and ringtone downloads. He also plans to raise college tuition, but increase financial aid to compensate. “Without [the stimulus],” said Doyle, “we would have had to cut schools and healthcare by 10 percent, 15 percent or 20 percent. It would have been devastating for our kids to get a decent education. It would have led to the laying off of teachers, police officers and fire fighters and healthcare workers.”
Total projected stimulus funding to state: $3.8 billion
Fiscal Stabilization Fund: $722 million
Medicaid funds: $1.2 billion

 

Feeling somewhat less pain

Georgia
FY2009 shortfall:
$2.4 billion
FY2010 shortfall: $1.6 billion
Georgia Gov. Sonny Perdue has joined the chorus of Southern Republicans saying they may decline some stimulus money. Among expected cuts: funds to clean up two toxic sites. The state has already cut $19 million from Meals on Wheels and adult daycare.
Total projected stimulus funding to state: $5 billion
Fiscal Stabilization Fund: $1 billion
Medicaid funds: $1 billion

Utah
FY2009 shortfall: $620 million
FY2010 shortfall: $721 million
Gov. Jon Huntsman, who has defended the stimulus and slapped fellow Republicans for “gratuitous political griping,” already has 17,000 state employees working four-day weeks. He is weighing tax increases. In mid-February Utah lawmakers learned that revenue collection had fallen another $235 million short of projections.
Total projected stimulus funding to state: $1.4 billion
Fiscal Stabilization Fund: $383 million
Medicaid funds: $320 million

Washington
FY2009 shortfall: $509 million
FY2010 shortfall: $2.8 billion
Washington’s shortfall may imperil a recently passed voter initiative that mandated smaller K-12 class sizes, but didn’t specify a funding source. Even with more than $2 billion in stimulus funds projected to end up in the state, Gov. Christine Gregoire recently said that falling tax collections mean the money won’t help that much with the state’s bad budget picture.
Total projected stimulus funding to state: $4.7 billion
Fiscal Stabilization Fund: $817 million
Medicaid funds: $2 billion

Maryland
FY2009 shortfall: $1.5 billion
FY2010 shortfall: $1.9 billion
Because of the stimulus, Gov. Martin O’Malley was able to cancel plans to lay off 700 state workers and plug holes in the public education budget. However, the state’s public defender is still targeted for devastating cuts, and the state correction department will lose 400 jobs.
Total projected stimulus funding to state: $4 billion
Fiscal Stabilization Fund: $723 million
Medicaid funds: $1.6 billion

Virginia
FY2009 shortfall: $2.3 billion
FY2010 shortfall: $1.8 billion
State revenues have taken their biggest plunge in history. The stimulus will stave off some cuts to public education, but may not save 13,000 non-teaching school support jobs. About $150 million to clean up the Chesapeake Bay may also evaporate. “We’re all going to swallow some toads,” said one member of the state Legislature.
Total projected stimulus funding to state: $4.5 billion
Fiscal Stabilization Fund: $985 million
Medicaid funds: $1.4 billion

North Carolina
FY2009 shortfall: $2 billion
FY2010 shortfall: $3.3 billion
About $3.7 billion of North Carolina’s federal stimulus money can go toward its state budget from now through the middle of 2011.  New Gov. Beverly Perdue will present her first state budget in March; she will have to defer her campaign pledge to make community colleges free to everyone in North Carolina. She is expected to ask for cuts of 4.5 percent in public education and 7.5 percent in higher education and the Department of Health and Human Services.
Total projected stimulus funding to state: $6 billion
Fiscal Stabilization Fund: $1.1 billion
Medicaid funds: $2.3 billion

Massachusetts
FY2009 shortfall: $3.6 billion
FY2010 shortfall: $3.1 billion
Gov. Deval Patrick warned last week that the stimulus would not forestall state budget cuts. There may still be large cuts to education at all levels. More than 400 teachers may be dropped from the Boston school system payroll, and the University of Massachusetts is bracing for cuts.
Total projected stimulus funding to state: $6.1 billion
Fiscal Stabilization Fund: $817 million
Medicaid funds: $3 billion

Iowa
FY2009 shortfall: $484 million
FY2010 shortfall: $779 million
Gov. Chet Culver brought in a 1.5 percent across-the-board cut plus $40 million in targeted reductions to balance the FY 2009 budget. For 2010, he’s proposed a 6.5 percent decrease that will affect 205 of 280 state programs, with about $400 million saved. Hundreds of Iowa State University employees are taking voluntary unpaid furloughs to save the university money. “The federal stimulus bill will not be an excuse to ignore the need to reduce state spending,” said Culver. The stimulus may, however, moot plans to raise the gas tax.
Total projected stimulus funding to state: $1.9 billion
Fiscal Stabilization Fund: $388 million
Medicaid funds: $550 million

Tennessee
FY2009 shortfall: $1.4 billion
FY2010 shortfall: $712 million
Tennessee Gov. Phil Bredesen had been planning to cut $900 million from the state budget, but about $500 million from the stimulus can be applied to the budget shortfall. Bredesen says some layoffs of state employees are still likely, but not the 2,300 that had been discussed.
Total projected stimulus funding to state: $4.3 billion
Fiscal Stabilization Fund: $771 million
Medicaid funds: $1.6 billion

Kansas
FY2009 shortfall: $185 million
FY2010 shortfall: $1.15 billion
Democratic Gov. Kathleen Sebelius and the Republican state Legislature attracted national attention last week with their budget standoff, which delayed state paychecks and tax refunds. When it ended, Sebelius had agreed to $300 million in budget cuts and the Legislature had agreed to borrow money from itself. “She blinked,” said Republican Senate Majority Leader Derek Schmidt. The Legislature, which did not want to factor stimulus funds into the budget, also voted to slash school funding by $32 million, but Sebelius reduced that number by line-item veto to $7 million. Still, school closings may loom.
Total projected stimulus funding to state: $1.7 billion
Fiscal Stabilization Fund: $367 million
Medicaid funds: $450 million

Minnesota
FY2009 shortfall: $1.4 billion
FY2010 shortfall: $2.5 billion
Though public defenders represent 80 to 90 percent of Minnesotans who appear in court, the state has laid off 53, and may fire 50 more. That puts the state back 150,000 hours of legal services. Gov. Tim Pawlenty had also recommended a $300 million cut to higher education, but that may be made moot by the stimulus. Pawlenty had been among those Republicans saying he had problems with the stimulus, but has now indicated he will accept the money, given that Minnesota usually sends more money to Washington than it gets back. Pawlenty will make new budget recommendations in March.
Total projected stimulus funding to state: $4.3 billion
Fiscal Stabilization Fund: $671 million
Medicaid funds: $2 billion

Hawaii
FY2009 shortfall: $232 million
FY2010 shortfall:
$680 million
State legislators look likely to defund a cancer institute at the University of Hawaii, which was relying on incoming cigarette taxes.The budget picture is bad enough that lawmakers are considering a bill that would cut off all insurance benefits for state employees retiring after July 1, regardless of how long they’ve worked for the state. The stimulus will, however, stave off budget cuts in education.
Total projected stimulus funding to state: $969 million
Fiscal Stabilization Fund $159 million
Medicaid funds: $360 million

Idaho
FY2009 shortfall: $131 million
FY2010 shortfall: $411 million
Idaho’s unemployment rate has jumped by 137 percent during the past year. Though Gov. Butch Otter was among the more outspoken critics of the stimulus, he was happy to take the money to increase unemployment benefits by $25 per week. But the state will still most likely cut education funding by 6.3 percent.
Total projected stimulus funding to state: $1 billion
Fiscal Stabilization Fund: $198 million
Medicaid funds: $300 million

 

Mississippi
FY2009 shortfall: $265 million
FY2010 shortfall: $87 million
Gov. Haley Barbour has ordered $200 million in overall state budget cuts since November, or about 4.8 percent from most state agencies, including $38 million from education. With Mark Sanford of South Carolina and his neighbor Bobby Jindal in Louisiana, he has been vocal in his skepticism about the stimulus package, particularly about anything that would expand unemployment entitlements. He will not be turning down the bulk of the stimulus package, however, and he is also willing to call on up to $90 million from the state’s rainy-day reserve to cover shortfalls in fiscal 2010. The state is likely to close, or lease out, a Gulf Coast facility for mentally ill children.
Total projected stimulus funding to state: $2.3 billion
Fiscal Stabilization Fund: $396 million
Medicaid funds: $790 million

South Carolina
FY2009 shortfall: $1.1 billion
FY2010 shortfall: $535 million
South Carolina has plunging revenues and unemployment of nearly 10 percent, third highest in the nation, with projections that it will hit 14 percent by the middle of the year. Yet Gov. Mark Sanford has been the leader of the GOP refuseniks who say they don’t want Obama’s stimulus money.  The state Legislature already plans to take the money, and has restored pre-stimulus cuts to public education. Among Sanford’s proposals for paying the state’s bills: closing three public university campuses.
Total projected stimulus funding to state: $2.8 billion
Fiscal Stabilization Fund: $562 million
Medicaid funds: $860 million

Alabama
FY2009 shortfall: $1.8 billion
FY2010 shortfall: Not yet available
Though Gov. Bob Riley made some of the same disapproving noises as his fellow Southern Republicans about the stimulus, he is taking the money because he needs it. The state budget he will present later this year will not include the education cuts it might have without the stimulus (education funding had already been slashed 12.5 percent in December). He expects to cut $400 million from non-education agencies and then get much of that money back from the stimulus in Medicaid money.
Total projected stimulus funding to state: $3 billion
Fiscal Stabilization Fund: $597 million
Medicaid funds: $850 million

Texas
FY2009 shortfall: None
FY2010 shortfall: $3.5 billion
Texas is one of the few states with a budget surplus. About 4 percent of state revenue comes from taxes associated with oil and gas production, and high gas prices in 2008 meant money for the state government. The coming fiscal year doesn’t look as bright. Gov. Rick Perry, who will be running for reelection in 2010, has been a leading opponent of the Obama stimulus plan, even going so far as to create a Web site called NoGovernmentBailouts.com. But he will undoubtedly take the money, and if projections are right, the stimulus will cover the projected shortfall for 2010.
Total projected stimulus funding to state: $16.2 billion
Fiscal Stabilization Fund: $3.1 billion
Medicaid funds: $5.4 billion

New Hampshire
FY2009 shortfall: $250 million
FY2010 shortfall: $500 million*
Gov. John Lynch has proposed closing eight of New Hampshire’s 33 district courts because of a shortage of money, laying off 300 state employees, closing a prison and 16 state liquor stores and raising a number of state fees, like tolls and the cigarette tax.
Total projected stimulus funding to state: $865 million
Fiscal Stabilization Fund: $166 million
Medicaid funds: $250 million

Pennsylvania
FY2009 shortfall: $2.3 billion
FY2010 shortfall: NA
Gov. Ed Rendell wants to merge the state’s 500 school districts into just 100 and legalize video poker. He has also proposed closing down the Scranton School for the Deaf, eliminating state funding for a new medical school in Scranton and slashing money to historical organizations and museums. While the recovery package won’t fix all of Pennsylvania’s problems, Gov.  Rendell said the estimated $5 billion the state could get would save 1,500 state workers’ jobs.
Total projected stimulus funding to state: $9.8 billion
Fiscal Stabilization Fund: $1.5 billion
Medicaid funds: $4 billion

Kentucky
FY2009 shortfall: $722 million
FY2010 shortfall: NA
Gov. Steve Beshear signed a bill on Feb. 14 to raise taxes on cigarettes and alcohol. The money is meant to balance the budget without making further cuts in education and healthcare. But he also had to raid the state’s rainy-day fund to the tune of $219 million, nearly emptying it, for what he acknowledges is a short-term fix. There will be another shortfall in fiscal 2010, of as-yet undetermined size, and State Budget Director Mary Lassiter acknowledges that the stimulus will not erase it.
Total projected stimulus funding to state: $3 billion
Fiscal Stabilization Fund: $535 million
Medicaid funds: $1 billion

Maine
FY2009 shortfall:
$265 million
FY2010 shortfall: $177 million
Because of the stimulus, Gov. John Baldacci was able to ask the education commissioner to reverse public education funding cuts from November. Other cuts proposed pre-stimulus: laying off state employees, trimming state tax rebates, and shipping state prison inmates to privately run prisons.
Total projected stimulus funding to state: $1.1 billion
Fiscal Stabilization Fund: $160 million
Medicaid funds: $470 million

Indiana
FY2009 shortfall:
$1.1 billion
FY2010 shortfall: NA
The Democratic-controlled state House passed a budget increasing education spending, and is facing a showdown with the Republican Senate and Gov. Mitch Daniels, who are pushing to spend the money on prison construction. The Senate is likely to make budget cuts; Daniels had proposed cutting university funding by 4 percent. The Democrats claim their bill, which takes the stimulus into account, will only drain $100 million from the state’s $1.3 billion in reserve funds and $100 million from a tuition fund. They must reach an agreement by April 29.
Total projected stimulus funding to state: $4.3 billion
Fiscal Stabilization Fund: $826 million
Medicaid funds: $1.4 billion

Missouri
FY2009 shortfall:
$342 million
FY2010 shortfall: $500 million*
The Republican speaker of the Missouri House, Ron Richard, suggested that his state not take stimulus money. “Just send it on back,” he said earlier this month. Gov. Jay Nixon, a Democrat, wants to use $800 million from the stimulus to balance the state budget for fiscal 2010, and to avoid the sorts of cuts he mentioned in his state of the state speech in January, which included laying off more than 1,300 state employees. He has also launched a Transform Missouri Initiative for spending the stimulus dollars in ways that will maximize job creation.
Total projected stimulus funding to state: $4.3 billion
Fiscal Stabilization Fund: $756 million
Medicaid funds: $1.6 billion

New Mexico
FY2009 shortfall:
$454 million
FY2010 shortfall: NA
New Mexico lawmakers are starting to question the repeated state income tax cuts that were passed in recent years. The state gets significant money from oil and gas extraction, but that stream is now at its lowest level in a decade. New Mexico is also one of several states taking a surprising approach to its budget shortfall: the Legislature and governor are considering abolishing the death penalty as a cost-cutting measure.
Total projected stimulus funding to state: $1.6 billion
Fiscal Stabilization Fund: $260 million
Medicaid funds: $630 million

Colorado
FY 2009 shortfall:
$604 million
FY 2010 shortfall: $386 million
Colorado exempts seniors and disabled veterans from property taxes. For the next three years, though, it looks like the exemption will be suspended. Colorado was 49th per capita in amount of stimulus funds received, but appears to be in relatively good shape compared to other states.
Total projected stimulus funding to state: $2 billion
Fiscal Stabilization Fund: $615 million
Medicaid funds: $880 million

Not feeling much pain — yet

Alaska
FY2009 shortfall: $360 million
FY2010 shortfall: $3 billion*
Gov. Sarah Palin recently had to drop nearly $500 million from the state budget because of falling oil revenues, but the state still has billions squirreled away. Palin has been among those Republican governors who have expressed fears that the stimulus will commit states to expanding some programs permanently. The Anchorage Daily News accused Palin of “hyping a hypothetical problem to burnish her conservative national credentials. She governs a state where one-third of the entire economy depends on federal spending. This year’s state budget is already bolstered with $2.6 billion of federal money.” State estimates of the budget shortfall for fiscal 2009 now exceed $1 billion, and there are some fears it could reach $3 billion in 2010. Alaska rises and falls on oil revenues — but mostly rises, since the state is able to send its own oil-derived stimulus check to state residents each October. Last year’s payment was $2,069 per resident, a record, and was supplemented by a “resource rebate” from surplus oil revenue of $1,200, for a total of $3,269.
Total projected stimulus funding to state: $783 million
Fiscal Stabilization Fund: $94 million
Medicaid funds: $220 million

Arkansas
FY2009 shortfall: $107 million
FY2010 shortfall:
$146 million
Compared to most other states, Arkansas is fiscally comfortable. Gov. Mike Beebe did not propose any cuts for his budget for the 2010 fiscal year, but was frugal on spending. The budget offered no new money for teacher health insurance, school transportation, Medicaid and prison beds. His concern now is whether Arkansas will be allowed to spend federal stimulus money on education, given that the state has not made education cuts. “We still have needs. We could spend more on highways. We could spend more on bridges.”
Total projected stimulus funding to state: $2 billion
Fiscal Stabilization Fund: $363 million
Medicaid funds: $730 million

Montana
FY2009 shortfall:
None
FY2010 shortfall: None
Thanks to revenues from commodities — oil, gas, agriculture, minerals, etc. — Montana began 2009 with the largest budget surplus in state history, around $1 billion. Legislators are fighting over whether to expand children’s healthcare by $35 million, or just $10 million.
Total projected stimulus funding to state: $799 million
Fiscal Stabilization Fund: $122 million
Medicaid funds: $180 million

Nebraska
FY2009 shortfall: None
FY2010 shortfall: $152 million
For now, Nebraska has avoided the budget free-for-all many other states are experiencing. Gov. Dave Heineman has even proposed boosting education funding by $100 million in 2009. However, the state’s tax revenues were down 8 percent in January, and pension funds for state teachers have taken a beating in the stock market. Heineman says the state will see more effects of the downturn in the next six months.
Total projected stimulus funding to state: $1.2 billion
Fiscal Stabilization Fund: $234 million
Medicaid funds: $310 million

North Dakota
FY2009 shortfall: None
FY2009 shortfall: None
Oil and agriculture taxes are keeping North Dakota afloat, and Gov. John Hoeven expects to end the current two-year budget period with a $64 million surplus. Recently revised projections for the 2009-2011 budget also give the state significant reserves. The state is even thinking about tax cuts.
Total projected stimulus funding to state: $609 million
Fiscal Stabilization Fund: $86 million
Medicaid funds: $110 million

Wyoming
FY2009 shortfall: None
FY2010 shortfall: None
Even mineral-rich Wyoming has had to revise its 2009 surplus, once
projected at approximately $900 million, to just under $260 million (and it may go lower). The state is currently weighing whether to use some extra cash to cut property taxes, or restore the state Capitol building. It is thinking about using $100 million from its “Permanent Mineral Trust Fund” to balance the budget.
Total projected stimulus funding to state: $538 million
Fiscal Stabilization Fund: $67 million
Medicaid funds: $110 million

West Virginia
FY2009 shortfall: None.
FY2010 shortfall: None
The state budget has been buoyed by taxes on coal mining, but those revenues are starting to slip. West Virginia’s slight budget surplus is now dwindling. Still, the state does not yet expect a shortfall for fiscal 2010.
Total projected stimulus funding to state: $1.4 billion
Fiscal Stabilization Fund: $220 million
Medicaid funds: $450 million

Oklahoma
FY2009 shortfall:
$114 million
FY2010 shortfall: $310 million
Gov. Brad Henry is still figuring out his budget, but his current big idea is a 10 percent cut in energy consumption by all state agencies. Henry, a Democrat, has expressed some concern about taking the unemployment benefit money in the stimulus package for fear of increasing state obligations to the unemployed in the long term.
Total projected stimulus funding to state: $2.7 billion
Fiscal Stabilization Fund: $473 million
Medicaid funds: $960 million

South Dakota
FY2009 shortfall:
$27 million
FY2010 shortfall: $32 million
On the chopping block for Gov. Mike Rounds are the South Dakota Arts Council and funds for the state fair — a sacred, 123-year-old institution in an agricultural state. Lawmakers may raise taxes to fund both.
Total projected stimulus funding to state: $662 million
Fiscal Stabilization Fund to state: $104 million
Medicaid funds to state: $120 million

Research by Lillian Bixler, Christopher M. Matthews, Vincent Rossmeier, Benjamin Travers, Gabriel Winant

Mark Schone is Salon's executive news editor.

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